He said as per the MoU, Mahindra and Mahindra wouldproduce Sports Utility Vehicles with an initial capacity of1.50 lakh units from the plant.However, he declined to commenton the location of the land in Tamil Nadu and the size of it.

Besides, he said, the Tamil Nadu Government was alsodiscussing with an automobile major for setting up a car plantnear Chennai with an investment of Rs 4,000 crore.

"We are in final stage of discussion with a globalautomobile major for setting-up a car plant near Chennai witha capacity of three lakh cars with an investments of Rs 4,000crore", he said.

He was speaking at the inauguration of the Apollo Tyresmanufacturing facility at Oragadam in which the tyre major hasmade investments to the tune of Rs 2,100 crore.

"A tractor plant at Nilakkottai by Sundareshwar Alloy andSteels and a Tractor component manufacturing plant atGangaikondan with an investment of Rs 1,000 crore would alsocome up", he said.

With these projects, Chennai alone would have a productioncapacity of nearly 22 lakh vehicles per annum making it as thenumber one automobile manufacturing centre in the world, heclaimed. According to him, the installed capacity of Chennaion producing cars, SUVs and tractors was at 17 lakh units peryear.

On tyre manufacturing, he said the city also succeeded inattracting investments from companies like Michelin, JK Tyres,MRF, ATC and Apollo Tyres.

"The total installed capacity in tyre manufacturing inChennai region is set to exceed 1,600 metric tonnes per day.

This will make Chennai the largest tyre manufacturing centrein the country and in the world. Therefore, Chennai is notonly the car capital of India but it is also the tyre capitalof India", he said.

He said the Government was also in the process of"drafting" a sector specific policy for automobiles which willcontain many new initiatives from the Government not only toattract investments but also to improve the competitiveness ofthe existing units.

He said the automobile testing facility, NATRIP, set up asper the Union Goverment''s guidelines near Chennai with aninvestment of Rs 500 crore would begin operations inSeptember this year.